CORPORATE DEVELOPMENTS
The following discussion should be read in conjunction with the accompanying financial statements and related notes and our 2020 Annual Report on Form 10-K.
Introduction
We are a diversified holding company with natural gas and electric utility
operations (serving customers in
Corporate Strategy
Our goal is to continue to build and sustain long-term value for our shareholders and customers by focusing on the fundamentals of our business: environmental stewardship; reliability; operating efficiency; financial discipline; exceptional customer care; and safety. Our 2021-2025 capital investment plan for efficiency, sustainability and growth, referred to as our ESG Progress Plan, provides a roadmap for us to achieve this goal. It is an aggressive plan to cut emissions, maintain superior reliability, deliver significant savings for customers, and grow our investment in the future of energy.
Throughout our strategic planning process, we take into account important developments, risks and opportunities, including new technologies, customer preferences and commodity prices, energy resiliency efforts, and sustainability. We published the results of a priority sustainability issue assessment in 2020, identifying the issues that are most important to our company and its stakeholders over the short and long terms. Our risk and priority assessments have formed our direction as a company.
Creating a Sustainable Future
Our ESG Progress Plan includes the retirement of older, fossil-fueled generation, to be replaced with zero-carbon-emitting renewables and clean natural gas-fired generation by 2025. When taken together, the retirements and new investments should better balance our supply with our demand, while maintaining reliable, affordable energy for our customers. The retirements will contribute to meeting our goals to reduce carbon dioxide (CO2) emissions from our electric generation.
By the end of 2020, we were able to reduce CO2 emissions from our electric
generation fleet by more than 50% below 2005 levels. As a result, we announced
new goals in
We have already retired more than 1,800 megawatts (MW) of coal-fired generation
since the beginning of 2018, which included the 2019 retirement of the
In addition to retiring these older, fossil-fueled plants, we expect to invest
approximately
•800 MW of utility-scale solar; •600 MW of battery storage; •100 MW of wind; •100 MW of reciprocating internal combustion engine (RICE) natural gas-fueled generation; and 06/30/2021 Form 10-Q 43 WEC Energy Group, Inc.
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•the planned purchase of 200 MW of capacity in the West Riverside Energy Center
- a new, combined-cycle natural gas plant recently completed by Alliant Energy
in
For more details, see Liquidity and Capital Resources - Capital Resources and Requirements - Capital Requirements - Significant Capital Projects.
In addition, we previously received approval from the
In
We also continue to reduce methane emissions by improving our natural gas distribution system. Our initial 2030 goal called for a 30% reduction in methane emissions from a 2011 baseline. Given advancements with renewable natural gas, we are setting a new target across our natural gas distribution operations to achieve net-zero methane emissions by the end of 2030.
Reliability
We have made significant reliability-related investments in recent years, and in accordance with our ESG Progress Plan, expect to continue strengthening and modernizing our generation fleet and distribution networks to further improve reliability.
Below are a few examples of reliability projects that are proposed or currently underway.
•WE is constructing approximately 46 miles of natural gas transmission main to
increase the quantity and reliability of natural gas service in southeastern
•WE and
•The Peoples Gas Light and Coke Company continues to work on its Natural Gas
System Modernization Program, which primarily involves replacing old iron pipes
and facilities in
•WPS is in the final year of its
For more details, see Liquidity and Capital Resources - Capital Resources and Requirements - Capital Requirements - Significant Capital Projects.
Operating Efficiency
We continually look for ways to optimize the operating efficiency of our company
and will continue to do so under the ESG Progress Plan. For example, we are
making progress on our Advanced Metering Infrastructure program, replacing aging
meter-reading equipment on both our network and customer property. An integrated
system of smart meters, communication networks, and data
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We continue to focus on integrating the resources of all our businesses and finding the best and most efficient processes while meeting all applicable legal and regulatory requirements.
Financial Discipline
A strong adherence to financial discipline is essential to meeting our earnings projections and maintaining a strong balance sheet, stable cash flows, a growing dividend, and quality credit ratings.
We follow an asset management strategy that focuses on investing in and acquiring assets consistent with our strategic plans, as well as disposing of assets, including property, plants, equipment, and entire business units, that are no longer strategic to operations, are not performing as intended, or have an unacceptable risk profile.
Our investment focus remains in our regulated utility and non-utility energy
infrastructure businesses, as well as our investment in ATC. In our non-utility
energy infrastructure segment, we have acquired or agreed to acquire majority
interests in eight wind parks, capable of providing more than 1,550 MW of
carbon-free energy in total. These renewable energy assets represent more than
We expect total capital expenditures for our regulated utility and non-utility
energy infrastructure businesses to be approximately
Exceptional Customer Care
Our approach is driven by an intense focus on delivering exceptional customer care every day. We strive to provide the best value for our customers by demonstrating personal responsibility for results, leveraging our capabilities and expertise, and using creative solutions to meet or exceed our customers' expectations.
A multiyear effort is driving a standardized, seamless approach to digital customer service across our companies. We have moved all utilities to a common platform for all customer-facing self-service options. Using common systems and processes reduces costs, provides greater flexibility and enhances the consistent delivery of exceptional service to customers.
Safety
Safety is one of our core values and a critical component of our culture. We are committed to keeping our employees and the public safe through a comprehensive corporate safety program that focuses on employee engagement and elimination of at-risk behaviors.
Under our "Target Zero" mission, we have an ultimate goal of zero incidents, accidents, and injuries. Management and union leadership work together to reinforce the Target Zero culture. We set annual goals for safety results as well as measurable leading indicators, in order to raise awareness of at-risk behaviors and situations and guide injury-prevention activities. All employees are encouraged to report unsafe conditions or incidents that could have led to an injury. Injuries and tasks with high levels of risk are assessed, and findings and best practices are shared across our companies.
Our corporate safety program provides a forum for addressing employee concerns, training employees and contractors on current safety standards, and recognizing those who demonstrate a safety focus.
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